Medellín Real Estate: How to Start Your Search for a Good Investment

This is a question readers continue to ask me and for which, until today, I have not had a solid answer.

Considering housing prices in the middle class neighborhoods of Medellín rose more than 10% in 2014, and the peso recently hit a 10-year low against the dollar, it’s certainly looking like a good time to buy.

For those of you interested in investing in the Medellín real estate market, this story is for you.

In order to give reliable advice and insights, I consulted with local leaders in the industry who are actively assisting foreigners with their real estate purchases.

Real estate transactions in any country can be complicated, let alone Colombia where you may not speak the language, nor have as much of an understanding of the local rules and regulations as in your home country.

To learn more about how foreigners can successfully invest in Medellín real estate, I spoke with the following experts, who provided me with important insights into the local market.

Founded in 1967, La Lonja’s purpose is to contribute to the design, promotion, and development of all real estate related activities with a view toward providing its members and the community in general guarantees of morality, security, honesty and efficiency. Plus, La Lonja also represents its members before the authorities, other unions and citizens.

When I asked Luisa about how foreigners should begin their search for real estate, she highlighted the importance of starting with a member of Lonja.

“In Colombia anyone can be a real estate agent, members of the Lonja have proven themselves to be the most professional in the industry. Lonja members almost always train and test their staff with Lonja courses.”

If you’re use to the well-regulated real estate industry of the United States, coming down to Colombia can be akin to entering the wild west.

One way to make sure you’re working with a reputable person is to confirm they’re an active member of La Lonja, and are thus subject to the association’s ethics and rules on doing business.

A disinterest in being beholden to La Lonja’s rules is likely a bigger reason for not joining than cost, as the monthly membership isn’t expensive.

2. Andres Durango, Lawyer and Real Estate Specialist

Andres is a down-to-earth, English-speaking native of Medellín. He studied in Bogotá, Paris and Singapore and assisted foreigners investing in China before returning to Medellín to do the same.

Andres thinks that foreigners should understand the legal complexities with buying real estate in Medellín before they start their search.

“The fun part is searching for property to buy, the hard part for a foreigner is actually how to do it properly,” Andres told me at his office in the Lugo building next to Oviedo.

“There’s no doubt that the opportunity in Medellín real estate is huge and foreigners enjoy the same property rights in Colombia as locals, but the paperwork needs to be in order from banking, to purchase agreements, to proper study of the property titles, to ensure the foreigner is protected in the transaction – that’s what we do.”

Andres and his family are also active real estate investors. Between his personal and professional experience with foreign investors, he seemed to me like an excellent candidate for foreigners seeking a lawyer specializing in real estate.

3. Brad Hinkelman, Owner of Casacol Propiedad Raiz

I also sat down with Brad Hinkelman, owner of Casacol SAS and a local developer and property manager.

Brad himself started investing in Colombia in 2009 before founding Casacol in 2013 to help guide both local and foreign investors in Medellin.

“I was definitely early, I saw the opportunity back then and acted on it,” Brad told me from his offices in Rio Sur.

“And today I really see the opportunity to improve the architecture and construction quality that you see in Medellín, bringing it up to a more international standard.” he says.

“All of our new construction projects are much more Miami, or Vancouver or London than they are the cookie-cutter Medellín styling. And that’s what forward-thinking locals, foreigners, and global travelers want – something fresh, high quality, and affordably priced.”

Brad’s company has four projects under joint development at the moment that he is marketing to locals and foreigners.

He says 75 percent of his investors are Colombians, but says “our local and foreign investors want the same thing at the end of the day, 1) potential for price appreciation, and 2) efficient property management that gives them 10 percent and higher returns.”

Casacol manages more than 100 apartments, most of which are within three buildings and has more than 150 apartment units under construction.

The best way to close a real estate deal in Colombia is to have a bank account in place.

The problem foreigners face in 2015 is that Colombian banks are requiring a cedula, where as recently as 2014, they accepted a passport. Of course an investor can’t obtain a cedula until he/she has invested, thus the banks have created a catch-22.

To get around this problem, both Brad and Andres referred me to Felipe Chávez at Alianza Valores, who handles private banking and low-cost foreign exchange for more than 130 foreigners in Medellín.

Felipe and Alianza can help qualified foreigners get Colombian bank accounts using their passports. He informed me that Alianza has a strict no-press policy, but I can attest to Felipes’ professionalism, and that of Carlos Cerro, his English-speaking assistant as all the staff at Alianza is.

For foreigners wanting to learn more about banking in Colombia, Felipe, who also speaks fluent English, can be reached at fchavez@alianza.com.co. The offices of Alianza are located at Calle 17A Sur #48-35, Avenida Las Vegas, piso 4 (Edificio Delima Marsh).

In conclusion, there is no shortage of terrific opportunities to invest in Medellín real estate.

Potential investors still need to do their due diligence. However, my hope is that through stories like this one, we can make the process of purchasing property a little easier.

14 COMMENTS

Hi Dave, that Colombia reports post you reference regarding the housing price increase is misleading as the price increase was only for NEW housing, not existing housing. The prices for NEW housing across all of Colombia increased an average of 9.47% in 2014 per square meter according to a recent report by DANE, which is Colombia’s statistics agency. According to DANE, in Medellín last year, NEW housing prices increased 10.99% in estrato 4 neighborhoods; 9.71% in estrato 1, 2 and 3 neighborhoods; and 7.61% in estrato 5 and 6 neighborhoods.

Prices for new housing are increasing faster than inflation is partly a result of demand outpacing supply. Fewer new housing units are being built in many cities in Colombia than are needed. Part of the price increase more lately has also been a result of the strong dollar, which has resulted in higher costs for some imported items used in construction (in terms of pesos). However prices for EXISTING housing in Colombia are not increasing as fast as new housing prices.

I also believe you should have talked to First American Realty Medellín, which is the largest foreign-owned real estate firm in the city, to get their perspective as they have probably been involved in more foreign real estate purchases in the city than any other firm. They know the market very well and the company has several bilingual real estate agents. First American Realty has been very active in assisting foreigners with their real estate purchases in Medellín for many years and they know the process for foreigners buying real estate in Colombia very well.

First American Realty also has a portfolio of investment opportunities and a portfolio of furnished rental apartments in the city. The company is also building its Global Express Business Center in El Poblado, which is planned to open in October/November 2015. This will be a one-stop shopping center for all major services catering to foreign visitors, tourists, residents and investors in Medellín. This will include apartment rentals, real estate purchases, visa services, shipping, financial services, legal advice and many other services.

This is a great article, thanks for posting. My husband and I were there in February and wanted to look at real estate for investment purposes and we found it to be a free for all with no system. Medellín desperately needs a system for buying and selling properties. I’m Colombian/American and felt lost, I can’t imagine how a foreigner would feel not knowing the language or culture. I wish this article would’ve been posted 3 months ago, but nonetheless it’s very helpful as we have not made or purchase yet. Thank you!

It really is a very good article, there are endless opportunities to invest in Medellin they are now very good.

Colombia is a democratic republic, with a privileged location in Latin America and rich natural resources.

It is currently one of the leading investment destinations in the region and has been classified by the World Bank as the first Latin American country to foreign investment protection.

Growth (GDP) in Colombia has been in the past significantly above the world average decade and, in recent years the country has been characterized by economic stability and be properly controlled its inflation rate.

Recently, the major rating agencies have assigned to Colombia best confidence indices.

There is freedom for foreign currency transactions with non-residents and freely convertible currency, but there is obligation to notify the Bank of the Republic (the central bank of Colombia) and, therefore, some operations are required to be performed through the exchange market, ie authorized intermediaries. andrescardona@ultrabursatiles.com

You can also bring your money quickly and safely without paying high costs. and get the benefits that the government gives to invest in Colombia.

Great real estate info
Definitely looking to read more about ‘healthcare AND badically everyday cost of living but also everyday living for a retired individual ‘an American man living 1/2 year there and 1/2?year somewhere else’
Thank you

First American Realty lacks any real customer service and good luck if they get back in touch with you in 2 weeks. Most of the properties shown on their site have been sold for a long time. At best it’s a bait and switch operation who is partnered with Allianza financial to get all your personal and financial info before they even show you a single place. Don’t waste your time with these people unless you like paying more and enjoy unprofessional people. Thank me, later!

In my opinion, Brad is an amazing business guy. His team are just as sharp, from the sales guys to the lawyers. I came from a nasty experience with First American, and going to Casacol was a relief. The way they handle business is for the long term, and they were the ones that helped me settle into MDE and my expat life. I have bought 2 properties with them (one for investment and the other one as a home, both in the nicer area of El Poblado). Now looking to buy a finca outside of MDE, probably Santa Helena, also with them.

Hi John, I am thinking about investing/relocating to Medellin or maybe Pereira in the near future and also came across First American Realty recently. If you take a look at their website and read their promotion materials, everything looks rosy but I am not so sure, if it reflects the whole truth. Reading your reviews on these people I started to think to look for the alternatives. What would you recommend?

Their a few other resources to consider when it comes to investing in Colombia. Its important to consider where the money is wired from, so that the money can be legalized correctly. Especially if your going to apply for a visa or if your a tax resident in Colombia. I have seen people receive money from a company to buy a home and then they are charged income tax on the value of the money that entered Colombia. Correct investment planning starts before the money enters Colombia.

Currently Ultraserfinco is not accepting wire transfers for foreigners any more, so you pretty much just have one choice if you do not have a cedula and that is Alianza Valores. You will get a better exchange rate with this guys than with a larger bank anyways.